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If a third-degree price-discriminating pure monopoly sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that demand is:_____________

Respuesta :

Answer:

The correct answer is letter "A": relatively more elastic in market X than market Y.

Explanation:

Third-degree price discrimination refers to offering a good or service at different prices in different places. Demand elasticity describes the responsiveness in price change of a good or service because of changes in other factors within the same market.

Thus, if a pure monopoly offers its products at a higher price in "X" market than "Y" market, it is likely the case that elasticity is higher in "X" market compared to "Y" market.

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